Number of big investor declined in Q1

FACTORS:The Financial Supervisory Commission said uncertainties created by global trade war concerns, protectionism and seasonal adjustments were behind the dip

By Chen Cheng-hui / Staff reporter

The number of “big players” on Taiwan’s two main exchanges dropped in the first quarter of this year compared with the final quarter of last year, but was the highest for the January-to-March period since 2013, government figures show.

A total of 1,135 “big players” participated in the Taiwan Stock Exchange (TWSE) in the first quarter, down 109, while there were 3,713 on the over-the-counter Taipei Exchange (TPEX), compared with 4,854 in the previous quarter, the Financial Supervisory Commission said on Thursday.

A “big player” is defined as an investor who trades at least NT$500 million (US$17.06 million) in shares on the TWSE in a single quarter, or an investor who trades more than NT$100 million on the TPEX. Such figures are seen as an important indicator of investor confidence in the local markets.

While the first-quarter decline was caused by seasonal factors as well as uncertainties stemming from a brewing global trade war and protectionism, the comparatively high numbers of big players was an indication that high net worth investors remained confident in local equities, the commission said.

The first quarter is usually a slow season for big players in terms of trading sessions, as this period includes a week-long Lunar New Year holiday, the commission said.

The TWSE’s benchmark index, the TAIEX, closed above the 10,00 points on May 23 last year and has remained above that mark. It rose 2.6 percent in the first quarter and on Friday ended 0.09 percent higher at 10,965.39 points.

A total of 58 sessions were seen in the first three months, four less than the previous quarter, Securities and Futures Bureau deputy director Sam Chang (張振山) told a news conference on Thursday.

“However, by a longer period of time, the first-quarter numbers of big players were the highest since 2013,” Chang said.

The commission said the relatively active sentiment was due not only to the TAIEX’s strong performance, but also to a day-trading tax cut implemented on April 28 last year that halved the tax from 0.003 percent to 0.0015 percent.

The Legislative Yuan on Friday passed an amendment to the Securities Transaction Tax Act (證券交易稅條例) to extend the tax cut until the end of 2021.

With increased participation by local investors, the average daily turnover in the stock market in the first quarter hit NT$133.976 billion, a 7.65 percent increase from the previous quarter’s NT$124.451 billion, after expanding 35.28 percent year-on-year to NT$104.87 billion last year, TWSE data showed.

Retail investors accounted for 58.33 percent of the combined turnover of TWSE and TPEX, followed by foreign institutional investors, with 26.01 percent, and domestic institutional investors, with 15.66 percent, the commission said.

However, the major beneficiaries of the booming equity market have been institutional investors, not retail ones, since large-cap stocks are usually too expensive for the retail investors who have been driving the market upturn, analysts said.